There are a lot of things you should do when starting a business, but it’s equally important to know what you should avoid.
As commercial real estate specialists, we know first-hand what makes businesses grow and flourish long-term, and what can set them back.
If you’re looking to start a business in Ontario, here are five mistakes to avoid.
Ready to find the perfect space for your business? As commercial real estate experts, we can help. Click here to send us an email.
1. Not Building a Budget
Having a plan is essential for every facet of your business startup process, but it’s particularly important when it comes to finances. Starting a business without a cohesive and well-thought-out budget can land you in the red quickly. When new businesses go under, financial shortsightedness is a common culprit.
Starting a business isn’t cheap – especially in Ontario. A strong financial plan can help you get your vision off the ground and running, but it’s important to have your bases covered before getting too far into the process.
2. Using Cash Flow For Major Expenses
You’ll have a lot of costs to account for when you start your business, but you’ll also have more than one avenue for managing them. As you get your business off the ground, you’ll need access to money for everyday expenses and transactions. When covering major upfront expenses like real estate, equipment, or appliances, avoid draining your cash flow.
Beyond your personal savings and equity, starting a business often entails getting a loan or line of credit. Securing financing from a lender is particularly helpful for covering larger costs as they allow you to maintain a healthy cash flow for everyday operations while paying off major expenses over a longer term.
Searching for tips about starting your own restaurant? We’ve got you covered. Check out a few of our market-specialized blogs below.
- How to Find a Restaurant For Sale in Toronto
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3. Working With Any Investor Who Comes Knocking
Working with angel investors is an easy and effective way to secure additional financing for your business. That said, not being selective about who you work with poses significant risks. In addition to providing capital, angel investors will have a role in major business decisions, so it’s crucial that you have a strong vetting process.
An investor that makes a good fit for your business is one that protects and shares your long-term interests and can offer you support beyond the financial resources. You’ll want to ensure that anyone you choose to work with has relevant industry experience and is familiar with your business model. Depending on what type of business you operate, finding a well-suited investor could be relatively simple or more difficult.
4. Spreading the Word Before You’re Ready
While launching your business is without a doubt an exciting process, it’s helpful to keep things under wraps until you’re close to opening day. With a strong marketing plan, getting the word out about your business is easy. However, maintaining that momentum with customers is exceedingly difficult if you’re not yet able to serve them.
Think of this as the commercial real estate equivalent of counting your chickens before they hatch. When it comes to starting a business, delays happen. As an entrepreneur, it’s wise to anticipate and account for setbacks in your startup process. This includes holding off on marketing until the finish line is in sight.
Thinking of launching your business in 2023? Stay up to date on small business trends with these helpful posts from our blog.
- How the Restaurant Industry is Changing
- Finding the Next Great Neighbourhood Spot
- How Inflation is Impacting the Restaurant Industry
5. Facing the Commercial Market on Your Own
Commercial real estate is highly specialized. If you want to be successful in finding the right place to run your business, you’ll need to work with an industry expert. That’s where commercial real estate agents (also called business brokers) come in.
Starting your own business means making a lot of decisions, and navigating the world of commercial real estate is no different. There are countless directions you can take your business in, each with its own unique pros and cons, but making the right decision for you can be incredibly difficult if you don’t completely understand what your options are.
A business broker can help you flesh out your business goals and determine which path is best for you in the commercial market. Based on your vision they may advise starting from scratch, purchasing an existing business, or going the franchise route. After that, they’ll help you find the perfect space for your business and ensure the transaction goes off without a hitch.
Ready to start your business? When you work with Carve you gain access to our comprehensive collection of on and off-market listings. Click here to discover our buying services or send us an email.
